Seminar series tackles China's growing role in Africa

Amb. David Shinn speaks about China's growing financial clout in Africa at the kickoff event of the Institute for African Development's seminar series.

By Jackie Sayegh

According to the World Bank, China is now sub-Saharan Africa’s largest export and development partner, representing about a quarter of the continent’s trade. That share is expected to grow even greater in the coming years.

In 2015, China’s President Xi Jinping pledged $60 billion of new investment in major capital projects in Africa and announced plans to facilitate more collaboration with Africa over the next three years. These include creating regional vocational education centers in Africa and offering African students 30,000 government scholarships and 2,000 educational opportunities in China.

At a recent meeting in Beijing, President Xi announced China’s most ambitious foreign policy to date – the Belt and Road initiative. The initiativeseeks to connect Asia, Europe, and Africa along five transport routes, and to build six international economic cooperation corridors.

The first speaker was David Shinn, former U.S. ambassador to Ethiopia and Burkina Faso and current adjunct professor of international affairs at George Washington University.

Shinn termed China’s engagement as one of mercantilism rather than neocolonialism. China’s involvement with Africa is primarily meant to sustain the Chinese economy and increase its export to Africa, he said.

These goals are not unique to China, as most development partners seek the same. The key difference, he argued, is the way the development projects are financed. Chinese projects are overwhelming state-owned and backed by government financing, which makes it difficult for companies or other countries with limited financial resources to compete.

Shinn explained that while Western countries are scaling back in the Africa banking sector, China has increased its involvement. Sixteen percent of China’s direct investment in Africa is in the financial sector. China’s largest bank, the Industrial and Commercial Bank of China, recently purchased a 20 percent stake in Standard Bank, South Africa’s largest bank, for $5.5 billion, representing the largest foreign direct investment in the country to date.

China’s long-term strategy will be one of increased engagement in all areas on the continent, Shinn concluded. Although there will be competition from India and Brazil for African markets, it will be political or economic setbacks in China itself that will ultimately determine its engagement in Africa and other parts of the world.

Jackie Sayegh is the program manager for the Institute for African Development